[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 08-13110 MAY 28, 2009
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 07-20398-CV-MGC
WORLD FUEL CORPORATION,
Plaintiff-Appellee,
versus
TIM GEITHNER,
Secretary of the Treasury,
U.S. DEPARTMENT OF THE TREASURY,
ADAM SZUBIN,
Director, Program Policy & Implementation,
Office of Foreign Assets Control,
OFFICE OF FOREIGN ASSETS CONTROL,
United States Department of the Treasury,
Defendants-Appellants.
________________________
Appeal from the United States District Court
for the Southern District of Florida
_________________________
(May 28, 2009)
Before BARKETT and FAY, Circuit Judges, and TRAGER,* District Judge.
FAY, Circuit Judge:
At issue in this appeal is whether the Office of Foreign Assets Control,
United States Department of the Treasury (“OFAC”) properly denied World Fuel
Corporation (“WFC”) a license to access the blocked assets of one of WFC’s
debtors. The district court remanded the matter to the OFAC for de novo
consideration. We dismiss for lack of jurisdiction.
I. FACTS
In 2004 WFC sold nearly 200,000 gallons of aviation fuel to Aero
Continente, S.A., a Peruvian air carrier. When Aero Continente failed to pay for
the fuel, WFC brought suit in Florida state court. On May 24, 2004 WFC won a
prejudgment writ of garnishment against Aero Continente in the amount of
approximately $299,000. On December 7, 2004 WFC won a final judgment on the
writ of garnishment in the amount of $142,854. However, WFC was unable to
collect because Aero Continente’s assets had been blocked by the OFAC 1 as of
*
Honorable David G. Trager, United States District Judge for the Eastern District of
New York, sitting by designation.
1
The OFAC administers U.S. economic sanctions programs. It derives its authority
from a number of statutes, such as the Foreign Narcotics Kingpin Designation Act at 21 U.S.C.
§§ 1901-1908 (“Kingpin Act”), the International Emergency Economic Powers Act at 50 U.S.C.
§§ 1701-1707 (“IEEPA”), and the Trading With the Enemy Act at 50 App. U.S.C. §§ 1-44
(“TWEA”).
2
June 1, 2004. The OFAC blocked Aero Continente’s assets under the authority of
the Kingpin Act2 and the Foreign Narcotics Kingpin Sanctions Regulations
(“Kingpin Regulations”) at 31 C.F.R. §§ 598.101 - 598.901.
Under the Kingpin Act and Regulations, the OFAC has authority to grant
licenses to access blocked assets. WFC made multiple requests for such a license,
but the OFAC denied every one. The OFAC gave two reasons for denying WFC a
license: that doing so would diminish the U.S. President’s leverage in addressing
the problem of international narcotics trafficking, and would prejudice any
potential future action to resolve the claims of all Aero Continente’s creditors.
II. PROCEDURE
WFC disputed the denial of its license application and brought suit in the
U.S. District Court for the Southern District of Florida. The district court issued an
Order Remanding the Matter to the Office of Foreign Assets Control for Additional
Investigation and Explanation (“Remand Order”). In its Remand Order, the district
court first noted that:
Under the APA, a court shall “set aside agency action, findings, and
conclusions found to be arbitrary, capricious, an abuse of discretion,
or otherwise not in accordance with law.” 5 U.S.C. § 706(2)(A).
Agency action is considered arbitrary or capricious if the agency has
2
Aero Continente was designated as a Significant Foreign Narcotic Trafficker (“SFNT”)
under the Kingpin Act. WFC did not challenge the designation of Aero Continente as a SFNT
under the Act, or the propriety of blocking Aero Continente’s assets.
3
relied on factors which Congress has not intended it to consider,
entirely failed to consider an important aspect of the problem, offered
an explanation for its decision that runs counter to the evidence before
the agency, or is so implausible that it could not be ascribed to a
difference in view or the product of agency expertise.
Remand O. at 4-5 (quoting Sierra Club, Inc. v. Leavitt, 488 F.3d 904, 911 (11th
Cir. 2007)).
After reviewing the OFAC’s reasons for denying WFC a license, the court
held that the OFAC acted arbitrarily and capriciously. The major problem with the
OFAC’s approach was that in evaluating WFC’s application to access funds
blocked under the Kingpin Act, it used the same factors as if the funds been
blocked under the International Emergency Economic Powers Act (“IEEPA”).
Specifically, the court found that the OFAC should not have considered
“presidential leverage” in evaluating WFC’s license application. The OFAC
argued that this was a valid consideration, invoking Dames & Moore v. Regan, 453
U.S. 654 (1981). In that case the OFAC blocked assets owned by the government
of Iran in response to the Iranian hostage crisis, under the authority of the IEEPA.
Id. The Supreme Court stated that blocking orders “permit the President to
maintain the foreign assets at his disposal for use in negotiating the resolution of a
declared national emergency. The frozen assets serve as a ‘bargaining chip’ to be
used by the President when dealing with a hostile country.” Id. at 673.
4
The district court declined to apply this logic to blocking actions initiated
under the Kingpin Act. The court did not find support in the Kingpin Act, the
Regulations, or the Act’s legislative history for such a consideration. Further, the
court noted that the blocking action at issue in Dames & Moore was initiated under
authority of the IEEPA, which was directed at foreign governments. Thus, it was
logical for the OFAC to consider the President’s leverage when evaluating a
license application in that context. In contrast, the court found that the Kingpin
Act was directed at “narco-traffickers and their organizations” and that its goal, as
expressed in a House Conference Report, was to “assist U.S. Government efforts to
identify the assets, financial networks, and business associates of major narcotics
trafficking groups.” H.R. R EP. N O. 106-457, at 42 (1999) (Conf. Rep.), as
reprinted in 1999 U.S.C.C.A.N. 304, 313.3
The district court also held that the OFAC should not have considered the
protection of future creditors in evaluating WFC’s application. This was because
the court found nothing in the Kingpin Act, the Regulations, or the House
Conference Report to support such a consideration, nor was it logically connected
3
The Report further stated: “If effectively implemented, this strategy will disrupt these
criminal organizations and bankrupt their leadership,” and that the Act “will properly focus our
Government’s efforts against the specific individuals most responsible for trafficking in illegal
narcotics by attacking their sources of income and undermining their efforts to launder the
profits generated by drug-trafficking into legitimate business activities.” H.R. REP . NO . 106-457,
at 42.
5
to the purpose of the Act. Thus, it was arbitrary and capricious for the OFAC to
deny WFC’s license application based on this factor.
Further, the court held that the OFAC should have considered whether the
WFC was an “innocent” party - in other words, whether it was involved in
narcotics trafficking itself. The court drew from this passage in the House
Conference Report: “There is no intention that this legislation affect Americans
who are not knowingly and willfully engaged in international narcotics
trafficking.” Id. The court noted that no such statements accompanied the IEEPA
or the Trading With the Enemy Act (“TWEA”).
After explaining that the OFAC cannot use the same factors to evaluate
license applications regardless of whether the funds were blocked under the
Kingpin Act or the IEEPA, the court ordered the OFAC to take a fresh look at
WFC’s license application, this time considering the language, purpose, and
legislative history of the Kingpin Act as distinguished from the IEEPA. The court
remanded the case to the OFAC for further investigation in accordance with its
opinion, and the OFAC has appealed that Order to us.
III. JURISDICTION
Before we can review the Remand Order, we must determine whether we
6
have jurisdiction to do so.4 “Under 28 U.S.C. § 1291 (1994), our jurisdiction is
limited to final decisions of the district courts.” In re Grand Jury Proceedings, 142
F.3d 1416, 1420 n.9 (11th Cir. 1998). “A final order is one that ‘ends the litigation
on the merits and leaves nothing for the court to do but execute its judgment.’”
Crawford & Co. v. Apfel, 235 F.3d 1298, 1302 (11th Cir. 2000) (quoting Huie v.
Bowen, 788 F.2d 698, 701 (11th Cir. 1986)). “As a general rule, remand orders
from district courts to administrative agencies are not final and appealable.” MCI
Telecomm. Corp. v. BellSouth Telecomm. Inc., 298 F.3d 1269, 1271 (11th Cir.
2002). There is an important distinction, however, between situations where a
district court orders the agency to “proceed under a certain legal standard,” and
situations where a district court remands for further consideration of evidence. Id.
“A remand order generally is found appealable in the former cases because the
agency, forced to conform its decision to the district court’s mandate, cannot
appeal its own subsequent order.” Id.
The OFAC analogizes to the MCI case, and claims that we have jurisdiction
to review the Remand Order because the court essentially “held that OFAC had
applied an incorrect legal standard and remanded to OFAC for application of what
4
We requested briefing as to “[w]hether the district court’s March 31, 2008, order
granting the motion to remand to the [OFAC] is immediately appealable?” Thereafter, we
carried the jurisdictional question with the case.
7
the district court viewed as the correct legal standard.” Initial Br. at 3. We do not
agree.
In MCI we held that a remand order to an administrative agency was
appealable because the order “mandated” the agency “to conform its decision to
law as interpreted by the district court.” 298 F.3d at 1271. In that case the district
court made two appealable rulings: first, it ordered the agency to use a different
pricing standard than it originally used, and second, it reversed the agency’s
determination that it lacked the authority to impose enforcement mechanisms. Id.
at 1272-73.
We do not agree that the MCI case is analogous to this one. We recognize
that one could argue, based on the court’s language directing the OFAC to
reconsider WFC’s application using specific factors and not others, that the court
did mandate a “certain legal standard.” However, we do not view the court’s
Remand Order that way. We make a distinction between a court telling an agency
that it used the wrong standard and requiring that the agency use a different one, as
in MCI, and a court telling an agency that it must develop a new legal standard
appropriate for the statute at issue, as in this case.
Indeed, in our view, the district court here determined that the OFAC did not
yet have a legal standard appropriate for the Kingpin Act, because it used a
8
standard derived from the IEEPA - a statute with an entirely distinct target,
purpose, and legislative history from the Kingpin Act. The court held that the
OFAC acted arbitrarily and capriciously because in using an inappropriate legal
standard, it considered factors totally unrelated to the Kingpin Act. The court
rejected the OFAC’s approach and explained how the agency must develop one
consistent with the Kingpin Act, as opposed to the IEEPA. To do so, the court had
to resort to the Kingpin Act’s legislative history. This is because while the
Kingpin Act and Regulations spell out a number of things in detail, such as
reporting requirements and prohibited transactions, neither the Act nor the
Regulations give any specifics as to what criteria the OFAC is to use when
evaluating a license application. Thus, in the absence of statutory or regulatory
guidance, the court looked to a House Conference Report.5 We take no issue with
this approach - after all, it is well-established that “[i]n the absence of any plain
meaning of the statutory language, [a court looks] to the legislative history of the
statute to determine whether Congress provided any guidance concerning its
intent.” U.S. v. Fields, 500 F.3d 1327, 1330 (11th Cir. 2007).
More broadly, we agree with the district court that there is nothing about the
5
While that Report did not constitute actual law passed by Congress, it is clear from the
Report’s language and procedural history that it represented the thoughts of both chambers.
Thus, it was a valuable source for information on a topic largely unaddressed in either the Act or
the Regulations.
9
Kingpin Act, its language, its purpose or its legislative history that would support
the reasons given by the OFAC to justify its action. Nowhere do we find any
indication that the Kingpin Act is designed to give the President “bargaining chips”
with narcotics traffickers.6 Neither is there any suggestion that the Kingpin Act
was intended to somehow supplement our bankruptcy laws.
In sum, as we read the Remand Order, the district court directed the OFAC
to take an entirely fresh look at WFC’s license application and to consider that
Aero Continente’s assets were blocked under the Kingpin Act, not the IEEPA.
Thus, rather than mandating a “certain legal standard” to the OFAC, the court
directed the agency to develop a new legal standard tailored to the Kingpin Act and
its target, purpose, and legislative history. As such, we conclude that the Remand
Order does not fall within the exception articulated in MCI, and we do not have
jurisdiction to review it.
DISMISSED FOR LACK OF JURISDICTION.
6
Procedures exist in other statutes for the government to seize and secure assets derived
through illegal narcotics activity.
10